News

Entropia et Impera – Inefficiency as a Business Model

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Divide and rule policy (Latin: divide et impera), or divide and conquer, in politics and sociology is gaining and maintaining power by breaking up larger concentrations of power into pieces that individually have less power than the one implementing the strategy. Historically, this strategy was used in many different ways… Read More »



European Daily: Speculating on an ECB Backstop

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ECB officials have signalled the possibility of a new backstop tool for sovereign debt markets. We think their main objective is to deter a speculative run that could interfere with plans to hike policy rates. But officials have remained deliberately vague regarding the triggers and features of a potential backstop,… Read More »


President Macron faces narrow path to reform given less favourable socio-economic conditions

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Emmanuel Macron’s election victory on 24 April supports policy continuity for France (AA, stable) and for European integration, but popular support for his reform agenda is considerably weakened compared to five years ago. Growing popular dissatisfaction with the political status quo is reflected in the highest abstention rate in over… Read More »



Wage-price spiral ahead? Not really

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•    We don’t see a wage-price spiral. Companies are actually paying less in labor per unit of output, we find. We think wages can rise more without adding to inflation. •    The S&P 500 plunged to new 2022 lows last week. We remain overweight equities in the inflationary backdrop but… Read More »


Russian gas stoppages stress EU’s political unity and economic outlook, accelerate Russian gas exit

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The decision by Gazprom to halt gas supplies to Poland (A+/Negative) and Bulgaria (BBB+/Stable) after both countries refused to use Russia’s proposed mechanism for gas payments is a significant escalation in the energy stand-off between Russia and the EU. The move also substantially increases risk of further gas-supply disruptions to other EU countries if… Read More »


Market Spinner

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MARKET MOVES •Last week concerns about the global economy and Fed monetary policy drove market sentiment. •Cut off of gas supplies by Russia introduced further major uncertainty into the outlook and also raised the risk of a potential oil embargo by the EU. •China’s COVID-19 lockdown measures and the ongoing… Read More »


Europe FX Forecast Revision

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Most of the CEE currencies that we cover ended 2021 with small losses against the euro, with the Czech koruna the only one bucking this trend, rallying by approximately 5%. The contrasting currency performances can, in our view, be largely attributed to differences in macroeconomic fundamentals, monetary policy, and risk… Read More »


Russia halts gas exports to Poland and Bulgaria

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“The decision by Gazprom to halt gas supplies to Poland and Bulgaria after both countries refused to use Russia’s proposed mechanism for gas payments in roubles is a significant escalation in the energy stand-off between Russia and the EU. The move also substantially increases risk of further gas-supply interruption to… Read More »